Azerbaijan’s tourism industry is filled with enormous potential. The promise within the so-called “Land of Fire” is one that the government is keen to capitalize on, and features heavily in its economic diversification strategy. President Ilham Aliyev underlined his government’s commitment to the industry by naming 2011 as the “Year of Tourism”. As a result, the year has seen a dramatic increase in investment in transforming the country into a vacation spot. An impressive winter and summer complex is being built on Shahdag mountain and aims to introduce winter sports and eco-tourism to the Caucasian country. Furthermore, a rich tapestry of history has been sown into the landscape providing an impressive source of hidden historical treasures. The potential for Azerbaijan’s tourism industry is huge; all that is left is for domestic and foreign investors to capitalize on it.
LUXURY & BUSINESS TRAVEL
According to the Central Bank of Azerbaijan (CBAR), 33.5% of all foreign visitors traveling to Azerbaijan come for business. There are two forces behind the vitality of this market: the country’s thriving energy sector, and its location as a crossroads between Europe, Central Asia, and the Middle East. In 2009 Azerbaijan ranked 24th in oil production and 30th in gas production internationally. Economic growth has led to considerable foreign investment and the advent of a sizeable expatriate community. As five-star hotels go up around Baku and the city’s MICE facilities expand, Azerbaijan is becoming a leading destination for international conferences. The expansion of hotel and restaurant facilities meeting international standards will also prove instrumental in servicing this key market.
In the same way Dubai has capitalized on its oil wealth to flourish as a lavish tourism hotspot, Azerbaijan is looking to capture the luxury market. Six five-star hotels will open for business in 2011 alone and the world’s top designer stores line Baku’s streets. Local investors have been successful in attracting major international brands to form partnerships and invest in Azerbaijan with the Hilton, Radisson, and Hyatt all operating luxury hotels in Baku. The arrival of these and other international chains has increased the country’s stature as an opulent destination. The luxury market is not the only target, however, as hotel construction has grown considerably across the scale in the past decade, with the number of hotels climbing from 60 to 499, and another 45 are under construction.
According to CBAR statistics, foreign visitors spent $620 million in Azerbaijan in 2010 compared with $745 million spent by Azerbaijanis traveling abroad. The government aims to reverse this deficit by meeting a target of 3 million foreign visitors per year and $1 billion in revenue.
As 2011 has been declared the Year of Tourism, the government is making significant attempts to regulate the industry. This is mostly by way of tightening the requirements for licenses, including requiring hotels to ensure 25% of their workers have had tertiary education, a requirement that has been made far easier to meet due to the establishment of the Azerbaijan Tourism Institute. Furthermore, hotels are now required to become part of a global distribution system, thus enabling easier bookings by international tourists.
Few countries are as simultaneously intriguing and obscure as Azerbaijan—The Land of Fire. In the West the name elicits a mere flicker in recognition of its Soviet past and its present as an oil and gas giant. However, Azerbaijan is blessed with natural wonders and a rich historical legacy. Throughout history, the territory of Azerbaijan has been at the periphery of a number of empires: Rome, Persia, Turkey, and Russia. As a consequence many cultures—Zoroastrian, Sasanian, Arabic, Persian, Shirvani, Ottoman, and Russian—have flourished and left behind sites of interest. At the heart of Baku lies a charming historic district composed of winding, narrow streets, medieval castles, and mosques. The most famous monuments include the 12th Century Maiden Tower and the Palace of the Shirvanshahs, built by a ruling dynasty during the late Middle Ages. Near Baku, in the town of Qobustan, you can find petroglyphs dating back 12,000 years. For historical and cultural tourists, the Sheki—the Khan’s Palace—is the only one of its kind in the world. It was built in 1762 by Hussein Khan, who was also well known as a poet under his pen name Mushtag. The Qobustan Rock Art Cultural Landscape was established in 1966 when the region was declared as a national historical landmark of Azerbaijan in an attempt to preserve the ancient carvings, mud volcanoes, and gas stones in the region and is included on UNESCO’s World Heritage list.
The topography of Azerbaijan is incredibly diverse. The country hosts nine of 11 major climatic zones, including snowcapped mountains, lush forests, and arid deserts, and offers many diverse investment opportunities for adventure tourism. The Caucasus Mountains block the harsh winter weather of the north, while the Caspian Sea moderates hot air from the south. The Caspian shore has potential as a beach getaway if the government can reign in pollution and the private sector can upgrade the seaside resorts to international standards.
Two-thirds of Azerbaijan rests on vast reservoirs of oil and gas, assets not only for the national economy but for tourism as well. In places such as the Zoroastrian Temple of Ateshgah near Baku and the hillside of Yanar Dag, flames actually spurt from the ground due to natural gas fires. In Qobustan you can see fields of mud volcanoes fueled by similar subterranean emanations. The government is also working to put Azerbaijan on the map as a new hot spot for winter sports. On the Caucasus mountain of Shahdag, construction has been underway since 2009 to build the country’s first world-class ski resort.
Azerbaijan is clearly endowed with an array of unique attractions that could draw a whole spectrum of tourists from Europe, Central Asia, the Middle East, and even farther afield.
One of the major challenges being tackled by the government is the development of a professional workforce to operate the growing hotel industry. The Azerbaijan Tourism Institute sends students abroad to develop their skills, while the Shahdag Winter-Summer Tourism Complex will employ thousands of local workers when it opens in December 2011. The complex management has said it will look abroad for ski instructors, but is dedicated to recruiting home grown talent to fill roles such as lift operators, rescue workers, and hospitality staff. Project Director Emin Hashimov views the surging hotel industry as a great boon to national employment. He told TBY, “By constructing the complex, we try to achieve a social goal—by developing winter sports and tourism in Azerbaijan. We want to create the conditions for a high-quality relaxation destination for domestic and foreign tourists as well as creating new opportunities
Azerbaijan is the mud volcano capital ofthe world, with about half of the world’s mud volcanoes. In addition to being a geological oddity, Azerbaijan has also been able to build a moderate health and wellness tourism profile around the mud emanating from the volcanoes and geysers, which is believed to be therapeutic, particularly for the skin.
THE VISA ISSUE
The Ministry of Tourism faces a number of significant challenges. One of the chief complaints of many foreign visitors is the bureaucratic hassle involved in obtaining an entry visa. Unless you have either official or diplomatic business in Azerbaijan, it’s no longer possible to pick up a short-stay or transit visa at Heydar Aliyev International Airport. This means that tourists now have to get their visas from an Azerbaijani embassy in their home country or country of residence. One of the aims of the Year of Tourism law is to facilitate the process of obtaining a visa by allowing tour companies to participate in the process and offering tourists the option of applying online.
Another major concern for the industry is the heavy pollution of the Caspian Sea coast. Much of Azerbaijan’s oil drilling is done offshore, raising the specter of oil spills. The rivers feeding into the Caspian are polluted by industrial and agricultural sources further upstream. One of the main difficulties in tackling the pollution problem is gaining the international cooperation necessary. Five countries now share the Caspian’s resources and contribute to its pollution.
Another concern is a lack of reliable tourist information facilities. A 2004 report by the Citizens Development Corporation found that tourist attractions are not clearly labeled in English. Museum exhibits also lack dual language information. A lack of tourism information centers or printed literature available from hotels or tour operators also makes it difficult for foreign visitors to explore the country. In addition, there are not enough professionally trained and government sanctioned tour guides. Some hotels offer their own in-house tours while the travel industry at large focuses mainly on offering service to locals traveling abroad. In a bid to improve the quality of service, one of the goals of the Year of Tourism initiative is to crack down on unlicensed tour companies.
In May of 2011 the Azerbaijani duo Eldar and Nigar won the Eurovision Song Competition. As a consequence, Azerbaijan will host the 2012 contest. Baku’s role as host will bring a great deal of much needed exposure at a time when the country has chosen to focus heavily on the tourism sector. The government is currently deciding on a venue and seeking a contractor to build the 15,000 to 25,000 person concert hall. The head of the Azerbaijan Tourism Association, Nahid Bagirov, has stated that guests of the contest will be housed in hotels or apartments, and hotel proprietors will not be allowed to raise their rates for the duration of the contest. Clearly, the government recognizes the rareness of this opportunity; the chance to shake off obscurity and cement the country’s place as a tourist hotspot might not come again.
In many ways, the Year of Tourism has come at the right time for the government and people to focus on their tourism offering well before the international spotlight falls on Azerbaijan for the 2012 Eurovision Song Contest. The medium-term future of the tourism industry very much rides on Azerbaijan’s success as a Eurovision host.
© The Business Year